Abu Dhabi Commercial Bank · ADX:ADCB
Abu Dhabi Commercial Bank — Abu Dhabi Commercial Bank PJSC — Q2 2024 Earnings Presentation
28 slides from Abu Dhabi Commercial Bank's earnings presentation, Jul 18, 2024
Slide 1: Second quarter 2024 Earnings presentation
ABU DHABI COMMERCIAL BANK PJSC adcb.com/ir Second quarter 2024 Earnings presentation 18 July 2024 Second Quarter 2024 Earnings Presentation
Slide 2: Disclaimer
Disclaimer This presentation is not an offer or solicitation of an offer to buy or sell securities. It is solely for use as an investor presentation and is provided as information only. This presentation does not contain all of the information that is material to an investor. By reading the presenta
Slide 3: Table of contents
Table of contents 1. Financial highlights 4 2. Digital & ESG highlights 19 3. Operating environment & guidance 22 4. Appendix 25 Second Quarter 2024 Earnings Presentation
Slide 4: 1. Financial highlights
1. Financial highlights Second Quarter 2024 Earnings Presentation
Slide 5: Strong earnings growth driven by increased lending focused on GREs and higher fee income
FINANCIAL HIGHLIGHTS Strong earnings growth driven by increased lending focused on GREs and higher fee income amid robust UAE economic fundamentals Highlights H1’24 key highlights • Strategy for accelerated growth driving strong momentum, with • Strong franchise fueled 23% YoY (AED 74 bn) and 7% YTD
Slide 6: H1'24 net profit before tax +28% YoY, supported by double-digit growth in net interest income
FINANCIAL HIGHLIGHTS H1’24 net profit before tax +28% YoY, supported by double-digit growth in net interest income and non-interest income Income statement (AED mn) H1’24 H1’23 ∆YoY Strong H1’24 financial performance (AED bn) Total net interest income(1) 6,577 5,782 14% Net profit before tax Operati
Slide 7: Q2'24 net profit before tax +30% YoY delivering RoATE of 16.5%
FINANCIAL HIGHLIGHTS Q2’24 net profit before tax +30% YoY delivering RoATE of 16.5%; driven by higher operating income and significantly lower impairment charge Income statement (AED mn) Q2’24 Q1’24 Q2’23 ∆QoQ ∆YoY Strong Q2’24 financial performance (AED bn) Total net interest income(1) 3,276 3,301
Slide 8: Higher risk-adjusted NIM on increased lending to high-quality credit counterparties
FINANCIAL HIGHLIGHTS Higher risk-adjusted NIM on increased lending to high-quality, low-risk credit counterparties; GREs driving 51% of YTD loan growth Net interest income (AED mn) Asset yield (%)(1) Key highlights H1’23 H1’24 • The Bank achieved net loan growth of AED 60 bn over the last 12 months
Slide 9: Strong broad-based growth in H1'24 non-interest income
FINANCIAL HIGHLIGHTS Strong broad-based growth in H1’24 non-interest income, with fee and trading income +20% YoY respectively Non-interest income (AED mn) Q2’24 Q1’24 Q2’23 ΔQoQ ΔYoY H1’24 H1’23 ΔYoY Key highlights Net fees and commission income 809 703 724 15% 12% 1,512 1,256 20% • Well-balanced r
Slide 10: 30 bps improvement in H1'24 C:I ratio
FINANCIAL HIGHLIGHTS 30 bps improvement in H1’24 C:I ratio, cost investments in revenue generating initiatives yielding good results with 17% income growth Operating expenses (AED mn) Cost to income ratio Key highlights • Over the last 12 months, the Bank has focused on investments to drive growth o
Slide 11: Robust balance sheet, with assets crossing AED 600 bn milestone
FINANCIAL HIGHLIGHTS Robust balance sheet, with assets crossing AED 600 bn milestone, with net loans +AED 30 bn YTD and deposits +AED 27 bn Balance sheet (AED mn) Jun’24 Mar’24 Dec’23 Jun’23 ΔQoQ ΔYTD ΔYoY CET1 ratio CAR 13.17% 16.43% Total assets 612,242 594,405 567,194 521,301 3% 8% 17% 16.43% Net
Slide 12: Robust loan growth of 10% YTD driving upward revision in FY'24 guidance
FINANCIAL HIGHLIGHTS Robust loan growth of 10% YTD and strong new credit pipeline driving upward revision in FY’24 guidance to c.15% (from 8-10%) Asset mix (AED bn) Net loans(2) (AED bn) Key highlights 612 567 332.2 • Strong loan growth marked by strategic targeting of 11% 318.2 10% 6% 302.0 exposur
Slide 13: Highly-rated portfolio of investment securities increased 3% YTD
FINANCIAL HIGHLIGHTS Highly-rated portfolio of investment securities increased 3% YTD to AED 133 bn, with bonds representing 99% of the portfolio Investment securities (AED mn) Investment securities: AED 132,609 mn(2) Key highlights Domestic 34% Government 65% • Investment securities increased 3% YT
Slide 14: Deposits up AED 27 bn YTD and AED 74 bn YoY
FINANCIAL HIGHLIGHTS Deposits up AED 27 bn YTD and AED 74 bn YoY, with greater representation of time deposits in funding mix amid higher rates Liability mix Customer deposits (AED bn) CASA split by business (AED mn) Customer deposits 72% 383.7 390.0 Total Contribution to 362.9 Borrowings 15% As at
Slide 15: Improved CET1 and CAR supported by strong H1'24 retained earnings
FINANCIAL HIGHLIGHTS Improved CET1 and CAR supported by strong H1’24 retained earnings and enhanced risk-weighted asset profile with CRWA increasing by only AED 6 bn YTD Capital adequacy ratio walkthrough (%)(1) 1.09 16.22 16.43 1.13 (0.17) (0.09) (0.25) 1.12 (0.13) (0.23) 2.23 2.14 12.86 13.17 31-D
Slide 16: H1'24 cost of risk at 58 bps, well within guidance of <80 bps
FINANCIAL HIGHLIGHTS H1’24 cost of risk at 58 bps, well within guidance of <80 bps as lower impairment charges drive significant improvement Cost of risk Non-performing loans(1) (AED mn) POCI assets (AED mn) and NPL ratio and NPL ratio including POCI FY’23 3.73% 3.44% 3.59% 4.20% 3.81% 3.87% Impairm
Slide 17: Al Hilal Bank's super app attracts 43,000 new banking customers in Q2'24
FINANCIAL HIGHLIGHTS Al Hilal Bank’s super app attracts 43,000 new banking customers in Q2’24; instant subscriptions launched for Shari’ah-compliant IPOs • Al Hilal Bank’s cloud-based super app has • Agreement signed with Abu Dhabi Securities acquired c.852,000 registered users since its Exchange (A
Slide 18: ADCB Egypt reports strong earnings as net loans grow 37% year-on-year
FINANCIAL HIGHLIGHTS ADCB Egypt reports strong earnings as net loans grow 37% year-on-year Egypt • ADCB Egypt delivered a strong financial • Continued focus on digital transformation, with performance despite a backdrop of H1’24 digital banking subscribers +49% YoY macroeconomic challenges • New HQ
Slide 19: 2. Digital & ESG highlights
2. Digital & ESG highlights Second Quarter 2024 Earnings Presentation
Slide 20: Strategic investment in digital driving customer growth and engagement
DIGITAL & ESG HIGHLIGHTS Strategic investment in digital driving customer growth and engagement, with 90% of customers registered for digital banking(1) Retail Banking Group (RBG) Corporate & Investment Banking Group (CIBG) Q2’24 digital highlights(1) • ADCB Group’s UAE operations, including Al Hila
Slide 21: Ongoing progress on Net Zero Banking Alliance commitments
DIGITAL & ESG HIGHLIGHTS Ongoing progress on Net Zero Banking Alliance commitments and preparation for introduction of IFRS S1 & S2 • As part of the Net Zero Banking Alliance, ADCB continues to Sustainable finance - lending (60 corporate deals Sustainable finance - select debt capital markets implem
Slide 22: 3. Operating environment & guidance
3. Operating environment & guidance Second Quarter 2024 Earnings Presentation
Slide 23: Resilient UAE economy despite heightened global uncertainty
OPERATING ENVIRONMENT & GUIDANCE Resilient UAE economy despite heightened global uncertainty Global: Central banks are likely done with interest rate US: Probability of a recession has diminished following Global: OPEC+ output cuts have helped tighten oil hiking cycle; rate cuts by Fed expected in H
Slide 24: Summary and guidance
OPERATING ENVIRONMENT & GUIDANCE Summary and guidance Summary FY’24 guidance H1’24 actual Medium term guidance (2024–2026) • Strong set of results marked by robust loan in Loan growth (Prev. 8%–10%) c.15% 10% Loan growth High-single digit core RBG and CIBG businesses, with FY’24 loan growth guidance
Slide 25: 4. Appendix
4. Appendix Second Quarter 2024 Earnings Presentation
Slide 26: Balance sheet as at 30 June 2024
APPENDIX Balance sheet as at 30 June 2024 AED mn Jun’24 Dec’23 ΔYTD Cash and balances with Central banks, net 38,964 45,375 (14%) Deposits and balances due from banks, net 42,658 37,625 13% Financial assets at fair value through profit or loss 11,944 10,063 19% Derivative financial instruments 17,50
Slide 27: Income statement for the six-month period ended 30 June 2024
APPENDIX Income statement for the six-month period ended 30 June 2024 Quarterly trend Half-yearly trend AED mn Q2’24 Q2’23 ΔYoY H1’24 H1’23 ΔYoY Interest and income from Islamic financing 8,326 6,715 24% 16,535 12,811 29% Interest expense and profit distribution (5,049) (3,784) 33% (9,958) (7,030) 4
Slide 28: ADCB Investor Relations
ADCB Investor Relations Contact information Click to view our reports For more information, please visit adcb.com/ir 2023 Annual Report or contact ADCB Investor Relations at ir@adcb.com adcb.com/annualreport 2023 Corporate 2023 ESG Report Governance Report adcb.com/esgreport adcb.com/cgreport Second
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